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TMI Blog2024 (8) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... entirely and there was malafide intention or ulterior motive for hiding the foreign assets from disclosing ; and as in the case of Hindustan Steel Ltd. [1969 (8) TMI 31 - SUPREME COURT] has laid down the dictum that simply on the technical or venial breach of the law the penalty is not automatically leviable - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... e from salary" and these ESOPs are clearly disclosed in annexure to Form 16 and Form 12BA issued by the employer for the year under consideration. Since the Assessee in the schedule AL has adequately disclosed his assets and liabilities against the items in the schedule based on his estimates, hence the Assessee is not required to maintain books of accounts. Further, as per the provisions of section 43 of BMA, it appears that when the Assessee fails to furnish any information or furnished inaccurate particulars of such return, then only the penalty of Rs.10,00,000/- is attracted. The provisions do not specify that the details of foreign assets must be disclosed in a particular schedule i.e. (Schedule FA as alleged) of the income tax return. The Assessee in support of his claim also relied on various judgments on this aspect and at the last claimed that the case of the Assessee is not a case intended to be covered by the legislation of the stringent BMA, let alone section 43 of the BMA under which the penalty is proposed as the Assessee was under bonafide belief that he is not supposed to disclose his foreign assets in any separate schedule such as "FA Schedule". 4. The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, if these assets are not reported in Schedule FA of the Income-tax Return for assessment year 2016-17 (relating to previous year 2015-16) or any subsequent assessment year by a person, being a resident (other than not ordinarily resident), then he shall be liable for penalty of Rs. 10 lakhs under section 43 of the Act. The penalty is, however, not applicable in respect of an asset being one or more foreign bank accounts having an aggregate balance not exceeding an amount equivalent to Rs. 5 lakhs at any time during the previous year. As per the above circular, the Board has clarified that if the foreign assets are not reported in Schedule -FA of the return of income for assessment year 2016-17 or in any subsequent assessment years by a person being the resident, then he shall be liable for penalty of Rs.10.00 lakhs u/s. 43 of the Act. 7. Therefore, in view of the section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and facts & circumstances of the case as discussed in para 8, this is a fit case for levy of penalty of Rs. 10 lakhs for Assessment Year 2016-17 for non-disclosure of foreign assets in schedule FA of Rol filed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.16 Part-B as well as in Form No.12BA. Hence, it cannot be said that the Assessee has not disclosed the foreign assets in any manner. The Hon'ble Co-ordinate Bench of the Tribunal in the case of M/s. Ocean Diving Centre Ltd. vs. CIT BMA No.22/M/2023 & ors. decided on 30.08.2023 has also considered almost the similar circumstances, wherein though the Assessee has not disclosed the foreign assets in Schedule FA but in fact disclosed the same in its balance sheet and schedule part-A-BS under "non-current investments" attached with the return of income and therefore the Co-ordinate Bench considering the fact that the Assessee has disclosed the foreign assets may not be in form FA but otherwise in its return of income ultimately held that the penalty is not warranted. For brevity and ready reference, the conclusion drawn by the Hon'ble Co-ordinate Bench of the Tribunal is reproduced herein below: "10. We have heard the parties and perused the material available on record and also given thoughtful consideration to the orders passed by the authorities below and rival submissions of the parties. It is not in controversy that the Assessee has not disclosed the information qua investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of the Act. Further, the AO may direct that such person shall pay by way of penalty of Rs. 10,00,000/-. No doubt the AO is empowered to impose the penalty as discretion is vested with him by using word „May‟ in the provisions. The discretion is always at wisdom of an authority, however, discretion is required to be exercised judicially and under the Judicial canons of law and in reasonable and justified manner to impart the Justice, by considering all the relevant circumstances and in case the Assessee is able to discharge its burden for reasonable cause, then the discretion against the Assessee has to be used cautiously and consciously. The Hon‟ble Apex Court in M/s Hindustan Steel Ltd. vs State of Orissa (1972) 83 ITR 26(SC) also reminded that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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